Fitch Rating's Devendra Kumar Pant says: "A 25 bps hike is pretty likely, but a lot will depend on the May inflation data. I think RBI will continue to monitor prices closely." He is of the opinion that RBI will effect more hikes during the year, to the tune of 50-75 bps, depending on the inflationary expectations. On the inflation front, Pant says non-food inflation is the core and if it comes down, one can expect some breather from the Mint Street. But food inflation will remain high due to the recent MSP (minimum support price) hike and the increasing demand due to the rising income levels, he says. "High food inflation is the new norm," Pant said, adding that past 6-7 years' average GDP growth of 8 percent has resulted in over 15 percent spike in national income levels. Standard Chartered Bank India economist and head of research, Samiran Chakraborty, too foresees a 25 bps hike in the repo rate, as inflation remains the primary issue. On the poor April IIP data, he said it is only a slowing and not a collapsing, hence nothing to worry about. He sees Q1 economic numbers to be under 8 percent and May inflation at 8.5 percent. Axis Bank economist Saugata Bhattacharya too forecasts a 25 percent spike, so does Yes Bank chief economist Shubhada Rao. Rao said the central bank had already indicated on May 3 that its medium term focus will be battening down inflation. However, she sees no incremental threat to core inflation as commodity prices are more or less stabilised, though high. But she pegs inflation closer to 9 percent till November. On growth numbers, she said, "The April data only shows that growth is moderating and not collapsing."....
No comments:
Post a Comment